Arwin has placed VUWIs in three of his accounts, including an Apple store with 200 employees. He claims the response has been very positive.
The VUWI, while still in beta test, has some advantages over other cashless systems, Arwin noted. The hardware is less expensive. Coin Free charges him $5 per month for each device. The transaction cost to the merchant is also less than other cashless readers. The processing fee can be as low as 3.5 percent.
Coin Free also offers prepaid purchases with VUWI, which is intended for captive accounts. The company is already offering a 1 percent loyalty reward for downloading the VUWI app. Other loyalty rewards are being developed.
When a vending location customer joins the VUWI loyalty program, they are asked to put a minimum $10 balance on their VUWI account, noted Matt Brady, vice president of marketing for Coin Free. This balance can then be used in the vending machines with VUWI readers or other VUWI compatible sites at gas stations, restaurants and retailers. This is the same concept being used by the emerging micro market industry, where a prepaid balance is established for purchases at the market so that there is not an individual payment being made for each item being purchased at the market.
This method increases the transaction amount for a single payment which then reduces the percentage of the merchant fee paid by the vending operator, Brady said.
At the Apple store Arwin services, 62 employees downloaded the VUWI app, even before any marketing was done to the employees.
Future improvements planned
Arwin uses QuickBooks for accounting. He realizes he will need a stronger accounting system as he grows. He has an associate working on a system.
He also wants to get a better handle on how well products sell. He has always believed that greater variety yields higher sales, but he realizes the large variety he carries has high inventory costs.
Arwin also realizes his static route deliveries are not cost efficient compared to other delivery systems vending operators are currently using. In order to better optimize his deliveries, he will need more accurate sales tracking than he has with manual accounting.
Arwin is optimistic about his future. He realizes that more and more customers are comfortable making vending purchases with cashless readers and mobile phones. The more cashless purchases customers make, the more higher ticket sales, he noted.
He also sees a lot of growth for his 1-year-old OCS/water service division. He is presently exploring a liquid coffee.
Arwin’s immediate goal is to find another route driver to free him up to concentrate on selling. His goal is to grow from his current two routes to four or five routes with around 500 machines. At this size, he thinks he will be able to maintain personal contact with customers and generate enough sales to yield a better profit margin.
As new products and technologies evolve, he thinks the business will be exciting for years to come.